The Business Exit Strategy Planning Guide

By Coach Jim Kaspari

After two decades of coaching over 600 business owners, I’ve learned that one of the most important—but often overlooked—chapters in the entrepreneurial journey is the exit. Whether you're preparing to retire, pivot into a new venture, or simply want to reap the rewards of your hard work, a clear and thoughtful exit strategy is vital.

This article is not a substitute for legal, financial, or tax advice—but rather a practical guide to help you start thinking strategically about what comes next. After 20 years in the field and five business books, I’ve walked alongside business owners through this very process—and I hope this piece helps shine a light on the path ahead.

Start with the Big Questions

Before we dive into spreadsheets and valuations, let’s start with a few core questions that should guide your planning process:

1. What are your personal and financial goals post-exit?
Do you want to retire and travel? Start another venture? Volunteer? Your next chapter will define the needs of your exit plan. Think through the finances you’ll need after taxes and fees. Factor in inflation. Consider: How much will your business need to grow to reach your desired valuation?

2. What is your business currently worth?
Valuation is where emotion meets math. You may feel your business is worth a certain number, but only a reputable valuation will reveal the truth. I highly recommend working with an experienced business broker, and in the meantime, reading resources like How to Value a Small Business to get your bearings.

3. Who is your ideal buyer or successor?
Is your business being passed to a family member? Sold to a competitor? Liquidated? Your successor shapes the timeline, the handoff, and even the tone of your exit.

4. Do you have a succession plan in place?
If something unexpected happens, who steps in? Start with a high-level SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). Think ahead about family dynamics, employee turnover, health concerns, and economic shifts.

5. What are your post-exit financial needs?
Be honest about what you need to live comfortably—and then reverse-engineer your strategy to make that number possible.

The 6 Steps to a Smart Exit Strategy

1. Early Planning & Goal Setting
Start now—even if you don’t plan to exit for another five years. Time gives you flexibility. Define your personal, financial, and business goals, and assign timelines and benchmarks to stay accountable.

2. Conduct a LIFT Analysis
A comprehensive look at your business from every angle:

  • L – Legal: Review contracts, bylaws, incorporation documents.

  • I – Insurance: Ensure the business and owner are adequately covered.

  • F – Finance: Evaluate revenue, profit, cash flow, debt, and costs.

  • T – Taxes: Are you structured efficiently? Are you using available write-offs properly?

3. Get a Business Valuation
Even if you’re not ready to sell, a valuation provides a roadmap. It shows you where you are—and more importantly, where you can improve. Use a pro, and revisit the number regularly.

4. Increase Business Value
If your business isn’t worth what you hoped—there’s still time. A business coach can help identify high-impact areas for growth, such as:

  • Improving profit margins

  • Streamlining operations

  • Enhancing recurring revenue

  • Building a strong leadership team

  • Strengthening your customer base

(Read more in How to Increase the Value of Your Small Business.)

5. Develop a Succession & Communication Plan
Who takes over? What gaps need to be filled? Map out roles, training needs, and team development strategies. Draft a time-based action plan with key milestones. And perhaps most importantly, create a communication plan. Employees, partners, and customers all need clarity—and reassurance.

6. Execute the Plan and Stay Flexible
Once you begin implementation, be ready to pivot. Markets change. Personal circumstances shift. But with a strong foundation, you’ll be equipped to navigate whatever comes your way.

Common Pitfalls to Avoid

  • Waiting Too Long: Delaying exit planning can cost you both time and money.

  • Unrealistic Expectations: Let go of emotional valuations and seek grounded, market-based numbers.

  • Poor Succession Prep: Train your team. Build systems. Prepare your replacement.

  • Lack of Financial Planning: Know your post-exit budget—and make sure your exit strategy supports it.

  • No Plan B: Always have contingency options in place.

  • Rushing the Sale: Desperation leads to discounts. Exit on your terms, not the market’s.

Final Thoughts

Your business represents years—maybe decades—of effort, sacrifice, and growth. Exiting that business is not just a financial transaction; it’s a personal evolution. With careful planning, you can leave with confidence, knowing that your business, your team, and your future are in good hands.

If you’ve read this far, thank you. I hope you found this guide helpful and thought-provoking. If you have questions or want help customizing a plan, I’d love to connect.

I’m available in-person at my Folsom office in the Sacramento region, or online via Zoom or Teams for a complimentary consultation.

Here’s to your next great adventure.